All Forum Posts by: Mike B.

@Eric Johnson

Currently these are the numbers

Purchase price , if agreed on , 3 mill , 600k down , with 50k closing , it’s a turn key operation so very little if any rehab .

They claim rents at 900 but ima go conservative and say 800 at 30 units = 24,000 x 12 = 288,000

Vacancy - 10% = 28,800

Insurance - they say 6,900 , I’ll say 10,000

Taxes , 18,500

Utilities - they say 12k but ima double it , so 24k

Property management - 6 % = 1,440 = 18k

Repair and maintenance - $17,000

Administrative- 3,500

Miscellaneous - 200

Mortgage - interest only , 4% , on 2,400,000 =96,000

Roughly 217k expenses - 288k income

71k cash flow

200,000 + in tax savings

Coc return - 10% on 665,000 injection

All rough estimates but conservative and with $ 800 rent for single bed and bath - 680 sq ft

Financing I would do a Freddie Mac loan with 80ltv and 4% interest only till I refinance 2 years down

@Charley C.

Thanks for the reply .

I haven’t counted the parking spots but I would say it’s suffice for the complex . I’ve drove it twice .

As far as build out numbers , I haven’t done too much research on building but i have asked a couple of GC on what residential multi family per sq ft is , he said roughly 130-140 sq ft finished , without land acquisition or development , which I would estimate at 200-400k per acre if you even can find it in a good location . So all in all , I would estimate building at 150-160 per sqft, seems high but that’s me not being the most educated on building which I should be . That puts me 700 sq ft X $140 = 98k X 30 units = 2,940,000 + land and development at $350,000 just to be conservative . So a 30 unit building would be roughly 3,200,000 + . .

@Bjorn Ahlblad

I agree bjorn , It’s a hot market here but I know things will cool down eventually . The bad part is I’m in need of finding something this year to lower taxes , and as you well know . It’s not easy to find , let alone , close on a deal . It will take minimum 2 months to close on a 2-3 million type deal , with proper research . I just don’t want to jump into a bad deal . If I find a decent deal that will cash flow 5-10k a month on a 500-700k injection , and reduce my taxes , I’m all for it .

@Greg Dickerson

I agree , it’s hot where some one will pay 3.1 or 3.2

I don’t want to risk it on speculating the increase of rent . I think 1 bd 1 bath at 850-900 is fair . I have to base calculations at 950 , that’s risky .

The biggest benefit for me is that it would eliminate a good portion of income taxes from depreciating which is my main goal . Cash flow is priority but the tax elimination is also great.

The unit can cash flow with a standard 30 year amort , 4 % rate , 20% down , maybe 2 year interest only . There’s an abundance of ways to tackle it but the only thing that bothers me is how small the units are for the price . Not much upside

I need some opinions and constructive criticism

There has been a deal offered to me couple days ago , off market .

Location - downtown , near community college . I would say it’s a decent location and up coming

Age - built in 2000

Units - 30

Sq ftage per unit - roughly -680 and some studios for 30 sq ft less

Current rent rolls are averaging around 890-910

I see new rents at 950 so they are creeping up .

Asking price right now is 3.5mil but realtor says to submit offer , both of us knowing it won’t be no where near that

Metered units

No pool , no major common area expenses

Small parking lot .

Brick building

Units are ready to go , recently renovated

It’s turn key

What would you do ? I wouldn’t like to think a 1 bed 1 bath can rent for much more than 925-975 , I’m researching the rates currently but just off the top of my head , 900-950 is fair for 1 bed 1 bath for downtown and won’t have a problem with vacancy and renting out

i estimated expenses at 41 % gross income from spread sheet

They had it at 30%

Thoughts and opinions

@Rebecca Mickler

When is this ?

Sounds exciting . Been looking to joint these type of events for a while . Looking forward to meeting people like minded , converse ideas and maybe team up with some folks . I’m looking for larger multi family 24-36 units , hopefully I won’t be the only one .

@Mark A. Kenny

Honestly I would say I’m more focused on cash flow at the moment , somewhere to park cash and have a decent return until Market comes down a bit and I find deals to invest in . That’s the ultimate goal , have around 500-1000 units or an array of properties that bring in 100k net profit a month to live on . Nothing crazy lol

@Mark A. Kenny

Currently looking in Caroina coast market , wilmington ,Nc exactly . But valid points throughout the entire thread . Maybe I should start vetting some syndication companies that can yield a high CoC and depreciation for taxes . Are there companies that are able to do 20-25% coc return with depreciation for taxes ?

@Todd Dexheimer

Very true ! I haven’t been bought in a recession so I’m not sure how lending rules change during recession , if less lending or tighter restrictions . But overall , your concept is true . A 1,000,000 investment should bring a way higher return than now